Watchdog sticks probe into Capita's handling of 1.7 million member civil service pension scheme

Public Accounts Committee talks of 'broken promises' and 'chaos' as 'thousands' of retired folk miss out on money

Capita has repeatedly "broken" promises to resolve the "chaos" engulfing the Civil Service Pension Scheme (CSPS) following its takeover of the administration – a move that left thousands of retired public sector workers unpaid. 

So says Parliamentary spending watchdog, the Public Accounts Committee, which this week launched an inquiry into the handover of the ten-year £239 million contract in December from previous incumbent MyCSP.

As The Register exclusively revealed, the troubles began early on as members of CSPS – which manages pensions for 1.7 million people – complained of unrecognized passwords and usernames on the portal Capita developed. Capita said it inherited 132,100 complex remediation cases, and claimed the work-in-progress backlog from the prior system was more than double the 37,000 items when it won the deal in 2023. 

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Capita ran to Microsoft for support, and promised the use AI and automation, in addition to its 500 full-time employees working on the project, would resolve the issues by March. It missed this deadline, as well as one set for June 30 and is set to miss March 2027. 

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The government subsequently withheld a £10 million payment to Capita over the CSPS fiasco. 

The National Audit Office, a spending regulator, has already launched its own probe into the failures and is now joined by the PAC, which says thousands of civil servants and their families have struggled to on and collect their pensions

The PAC has already held three evidence sessions on Capita and the government’s efforts to ameliorate the situation. The law was changed in the Budget 2026 to mitigate the impact of administrative delays in CSPS on bereaved families. 

Sir Geoffrey Clifton-Brown, chair at the PAC, said in a statement: 

"In response to the alarming reports of hard-working civil servants being thrown into financial uncertainty following Capita’s takeover of the CSPS, we have held a number of evidence sessions with both the top leadership of Capita, and the civil servants and ministers of the Cabinet Office who have ultimate responsibility for overseeing the contract.  

"Over and over again, promises have been made and broken by Capita, to our faces in formal evidence sessions, that they will get a grip on what has gone wrong. As a result, we are launching an inquiry, which will be informed by the authoritative factual basis provided by the NAO, which supports the scrutiny work of this Committee."

The inquiry will draw on the finding of the NAO's forthcoming report on the switch of CSPS to Capita, and will take into consideration the status of the scheme at go-live date, how Capita has performed, and the effect on CSPS members, plus take a look into the way the Cabinet Office has overseen the prior scheme and the switch to Capita.